Weaker December figures for mortgage lending

UK Finance has revealed that mortgage lending for first-time buyers, home movers and buy-to-let purchases all fell in December 2017 compared to the previous year.

However, 2017 overall saw the highest number of first-time buyers (365,000) since 2006.

There were 30,800 new first-time buyer mortgages completed in December, 5.2% fewer than in the same month a year earlier. The £5.1bn of new lending in the month was 1.9% down year-on-year. The average first-time buyer is 30 and has an income of £41,000.

UK Finance said 2017 overall saw 365,000 first-time buyers, the highest number since 2006. This is an annual increase of 7.4% from 340,000 in 2016.

There were 30,700 new home mover mortgages completed in December, some 4.7% fewer than in the same month a year earlier.

The £6.5bn of new lending in the month was 3% down year-on-year. The average home mover is 39 and has an income of £55,000.

There were 30,500 new homeowner remortgages completed in December, some 7.4% more than in the same month a year earlier. The £5.2bn of remortgaging in the month was 8.3% more year-on-year.

In addition, there were 5,300 new buy-to-let house purchase mortgages completed in December, some 17.2% fewer than in the same month a year earlier. By value this was £0.8bn of lending in the month, 11.1% down year-on-year.

There were 9,900 new buy-to-let remortgages completed in December, some 11.6% fewer than in the same month a year earlier. By value this was £1.6bn of lending in the month, 11.1% down year-on-year.

Paul Smee, head of mortgages at UK Finance, said: “2017 saw the number of first-time buyers reach its highest level in a decade, which is welcome news for those getting started on the housing ladder.

“But although the market remains competitive there is no room for complacency, with weaker December figures consistent with our market forecast of subdued growth this year.

“We are also seeing a less buoyant buy-to-let market, which continues to be impacted by recent tax and regulatory changes. This will continue to flatten gross lending volumes this year.”

Steve Seal, director of sales and distribution at Bluestone Mortgages, added: “Becoming one of the fastest growing groups in the market, it’s great to see first-time buyers increase year-on-year. However, there is still a larger group of people that are not being treated fairly when it comes to the mortgage application process.

“Successful business owners, entrepreneurs or contractors are being turned away by high-street lenders for not fitting traditional lending criteria. Yet it is this group of workers who are the backbone to our UK economy and need greater support from the wider industry.

“Many of our first-time buyers are from this pool of borrowers and until the mainstream industry learns to understand their situation on a case by case basis, specialist lenders will continue to support these borrowers and give them the chance of home ownership they deserve.”